Down Payment Loan
A down payment loan is determined by the purchase price and the amount of the down payment. Coming up with enough cash to put down when buying a house is the biggest roadblock for most hopeful home buyers. But how much do you really need? It may be very tempting to go with the lowest down payment possible. But the key to building net worth is to buy smart, especially when it comes to such a large purchase as a house.
Your down payment plays an important role when buying a home. The higher your down payment, the lower your monthly mortgage payment will be. The amount required for a down payment depends on your loan type, with some requiring no down payment at all. Tim Barr and Homestead Mortgage can help you find the right down payment loan that best fits your financial needs.
What is a Down Payment?
A down payment is a portion of the purchase price that a home buyer pays from their own funds. It’s the part of the home purchase price that you don’t finance, but instead pay out-of-pocket.
Conventional Home Loan
Conventional loans conform to the loan limits set by Freddie Mac and Fannie Mae’s underwriting requirements, and offer more flexible terms and fewer restrictions than government-backed loans. People often think conventional loans require a minimum of 20% down payment. but conventional loans also allow for as little as 5% down. For borrowers with good credit profiles, conventional financing is the best way to go.
- Low Down Payment
- Low Interest Rates
- Faster Loan Processing
FHA Home Loan
An FHA loan is insured by the Federal Housing Administration (FHA), and great for buyers with less than stellar credit or a low down payment. An FHA loan the easiest loan to qualify for, which allows you to put down as little as 3.5% for a down payment. Rates do not change based on credit score and are typically lower than conventional loan rates.
- Low Down Payment
- Low Closing Costs
- Flexible Income and Credit Requirements
USDA Home Loan
A USDA loan is backed by the United States Department of Agriculture (USDA), and designed to provide eligible homebuyers in rural and suburban areas who had limited financing options to realize their dream of homeownership. Almost 97% of the U.S., which includes small towns and suburbs, are eligible properties. The USDA Mortgage eligibility map shows you the areas where you can use this loan.
- No Down Payment
- Low Mortgage Insurance
- Flexible Credit Guidelines
VA Home Loan
The VA loan is a mortgage that’s issued by approved lenders and guaranteed by the U.S. Department of Veterans Affairs (VA), that guaranteed millions of veterans, active duty military members and their families to purchase homes. This historic benefit program helps returning service members, active military or veterans make home ownership a reality for who might otherwise not be able to afford it.
- No Down Payment
- No Mortgage Insurance
- Flexible Credit Requirements
If you are a renter who’s tired of paying someone else’s mortgage, now may a be great time time to pursue your dream of home ownership. No matter your financial situation, there are numerous programs that will help you buy a home without a 20% down payment. To learn more about your down payment loan options, contact the Homestead Mortgage home loan expert Tim Barr today!